You signed a contract 5 years ago to sell all the timber on your land for $500,000. You cut your timber this year. You have a total tax basis of $120,000 in the timber. On Jan 1 FMV for timber is $450,000. How much of the gain is considered ordinary income?

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter11: Invest Or Losses
Section: Chapter Questions
Problem 39P
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You signed a contract 5 years ago to sell all the timber on your land for $500,000. You cut your timber this year. You have a total tax basis of $120,000 in the timber. On Jan 1 FMV for timber is $450,000. How much of the gain is considered ordinary income?
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